Good afternoon, everyone.
We have to make our economy recover and take off at the same time. Today’s expanded meeting with economy-related minsters has been arranged with a view to further reinforcing cooperation among businesses as well as between businesses and the Government to expedite an economic rebound.
Of note, joining us today are President Lee Jung-bae of Samsung Electronics, CEO Lee Seok-hee of SK Hynix, President Gong Young-woon of Hyundai Motor Company, President Choi Woong-seon of INFAC Corporation, CEO Ka Sam-hyun of Korean Shipbuilding and Offshore Engineering, President Jung Jin-taek of Samsung Heavy Industries, CEO Bae Jae-hoon of HMM and President Hwang Ho-seon of Korea Ocean Business Corporation. These business leaders are from the nation’s strategic semiconductor, automobile, shipbuilding and shipping industries, which constitute the backbone of the Korean economy. Thank you for joining us despite your busy schedules.
Our economy has demonstrated robust resilience even amid the COVID-19 crisis. The Korean economy, with negative growth kept to a minimum last year, was the 10th largest in the world, up from 12th the year before. The country’s per capita GDP surpassed that of Italy, a G7 member state. Since the beginning of this year, faster-than-expected recovery has continued primarily in exports and investment. First quarter GDP has recovered to a pre-COVID-19 level or is forecast to nearly do so.
When it comes to jobs, the most important indicator, the number employed in March has increased by 314,000 year-on-year, shifting to an upswing for the first time in 13 months. More than half the number of jobs increased has been from the private sector. In particular, employment numbers and rates among young adults have risen significantly. What is very promising is that the number of furloughed workers, which surged during the COVID-19 crisis, has dropped sharply. Even though it will take a little more time to return to the situation before COVID-19, employment is projected to improve steadily going forward. All of this is the result of our people and businesses prevailing over difficulties while withstanding COVID-19-induced shocks over the past year.
However, there is still a huge difference between what economic indicators point to and what the people feel about their livelihoods and the economy. Many of them have yet to return to their pre-COVID-19 income levels. The unemployed and young job seekers who have not been able to find jobs as well as the self-employed whose business hours are restricted continue to suffer hardships. The Government is not content with these economic indicators. We will make even swifter and stronger efforts so that people can sense the outcome of economic recovery quickly.
To see clear improvement in people’s lives, economic recovery has to be accelerated. Both exports and domestic demand should be revitalized. The Government is swiftly disbursing this year’s expansionary budget and supplementary budget intended to provide support for microbusiness owners and vulnerable workers. Various measures, including consumption incentives and a 110 trillion-won investment project, are being implemented as planned to boost domestic demand.
On top of this, we will take additional steps whenever necessary. International organizations and global credit rating agencies note that the Republic of Korea still has sufficient fiscal space. The epidemic prevention and control situation and economic conditions will continue to be monitored closely. At the same time, we will keep devising necessary policy measures while maintaining an expansionary fiscal stance so that the economy will rebound and everyone can enjoy an inclusive recovery. As soon as the epidemic is brought under control, we will also prepare bold measures to boost consumption.
The global economy is now passing through a time of colossal change. Competition is growing fiercer every day as countries try to secure a commanding position in the global market as it recovers from the COVID-19 shock. In addition to a transition to digital and low-carbon economies, there are also moves by some countries to reorganize the global supply chain in ways that prioritize themselves.
The Government has been making determined efforts to promote recovery in our mainstay industries such as semiconductors, automobiles, shipbuilding and shipping and to foster new industries such as biohealth, system semiconductors and eco-friendly cars. Our endeavors are taking effect swiftly. Now is the time to further build up the strength of our mainstay and new industries. We will not only overcome the crisis but also prepare for the future beyond by facilitating corporate investments and enhancing export competitiveness. Companies and the Government will have to become one team to overcome the rough waves of changes and seize opportunities ahead of others.
Moves to reorganize the global supply chain are most pronounced in the semiconductor industry. Exports of domestically manufactured semiconductors have been climbing for nine consecutive months, firmly maintaining their world’s No.1 status. What’s more encouraging is that, in addition to memory semiconductors, system semiconductors are growing remarkably as a definite flagship item for our exports.
The semiconductor industry is a key national strategic industry that can determine the present and future of our economy. We should continue to lead the global semiconductor supply chain. We will vigorously support our country’s emergence as a comprehensive semiconductor powerhouse by using the “semiconductor super cycle” now facing the world as an opportunity to take a new leap forward. Diverse support measures will be formulated to maintain our current No. 1 global ranking and increase our lead further.
Korea became one of the world’s five largest automobile producing countries last year, and our output and export of electric and hydrogen vehicles are rapidly growing, further raising expectations for their growth potential. In step with the era of eco-friendly cars, not only finished vehicle manufacturers, but also their more than 1,000 suppliers must have the highest competitiveness. Of note, the demand for rechargeable batteries is rapidly rising due to the expansion of the electric car market.
Our technology for small batteries is the best in the world. Batteries are like a second semiconductor business for us. Comprehensive support strategies will be established to obtain a dominant position in the global battery market. Regarding the recent supply shortfall for automotive semiconductors, the Government is doing all it can to secure supplies by cooperating with related businesses. We will increase the rate of local production of relevant semiconductors through an alliance between the semiconductor and automobile industries.
Korea’s shipbuilding industry is by far the world leader, sweeping more than half of global orders over the past six months, primarily for high value-added and eco-friendly ships. The shipping industry – the foundation of export competitiveness – is also expected to recover its container transportation capacity within this year to a level before the bankruptcy of Hanjin Shipping. Shipbuilding and shipping industries should take the rise in cargo traffic resulting from the global economic recovery as an opportunity to make a clear leap forward. To make sure that rapidly increasing orders can be met without disruption, we will assist the return of skilled workers who retired during the shipbuilding industry’s restructuring. The endeavor to rebuild the local shipping industry will be given impetus. The effort will include a Korean-style sale and leaseback business with the Korea Ocean Business Corporation providing affordable charter hire rates.
Compared to their status before COVID-19, our flagship and new industries are already more competitive. The spirit to take on new challenges and the efforts to achieve mutual benefit have also become stronger among businesspeople while weathering the crisis. Now, through cooperation between the Government and industries, our manufacturing will usher in a new take-off era and lead an inclusive recovery and the transition to a pace-setting economy.
I ask relevant ministries and agencies to make efforts to devise measures tailored to major business lines while closely communicating with industries. I would like you to lift excessive regulations that inhibit innovation and more effectively improve tax incentives for investments. The support system will also be strengthened so that industries can preemptively reorganize their businesses. I will continue to visit sites where they have invested. I hope that today’s meeting with business leaders will serve as an opportunity to accelerate our economy’s recovery and leap forward.